Experts in the real estate sector have commended the federal government for accepting to provide 10 percent funding for the National Housing Fund (NHF) contributors seeking loans of N5million and below.
They have also urged the federal government to empower mortgage institutions to carry out their statutory responsibility
The acting managing director of the Federal Mortgage Bank of Nigeria (FMBN), Mr Richard Esin recently announced that the federal government has approved 10 percent funding for National Housing Fund (NHF) loans of N5 million and below saying that loan applicants would no longer make down payments of 10% of the house price.
The principal consultant of AA Abdulfatai & Co, ESV Abdulfatai Abdulrauf said though most government proclamations were merely on papers, it will be a welcome development if implemented.
He said: “It’s a welcome development but sincerely, some of these are mere political statements that won’t hold much water. However, government does not need to do it directly but are supposed to empower the mortgage institutions to carry out their statutory responsibility and by doing so, the condition that will be attached to it should not be something that will scare away contributors”.
He added, “For instance, if you say that somebody can access 5 percent and you begin to request for a property that is within the range of the amount or above as collateral, then it won’t work out.’’
He also suggested that the gratuity of the entire government workers that have served from 5 years upward should stand as their collateral to access loans adding that the percentage shouldn’t exceed 6 percent.
“This is because in countries like Europe, they have between 4 and 6 percent interest rate, therefore, Nigeria can go to Europe and access the loan at 6 percent and give it back to our people at 7 or 8 percent,” he said.
Abdulrauf also said such loans should be extended to civil servants at the rural areas and not only workers residing in major cities like Abuja, Lagos, Port Harcourt among others.
On his part, member, Board of Trustee, Real Estate Development Association of Nigeria (REDAN), Chief Guy Okechukwu further described the pronouncement as a welcome development.
“The problem will be if developers can build houses for N5m and below but even if we build; they will be low class houses because my 3 bedroom in Calabar is sold for N9. 5m and Abuja is even worst,’’ he said.
Also, the president of Quantity Surveyors Registration Board of Nigeria (QSRBN), Mallam Hussaini Dikko said the new effort of the federal government would impact positively in the real estate sector if implemented stressing that most mortgages for NHF contributors were problematic.
“This is because, the subscribers are unable to put up deposits required by their mortgage institutions or banks to withdraw the rent, however; the tenure, level of property and amount to needs to be adjusted to make a greater difference.If implemented faithfully it will make greater difference in putting the mortgages together”, he concluded.